Writing at Economics 21 Brian Riedl takes another stab at explaining why entitlements (and primarily Medicare) are the cause of our long-term budget deficit. Read it and make your own decision.
I’m still trying to find someone’s, anyone’s explanation of how health care spending can grow at a multiple of incomes without either a) forcing an unending series of tax increases, something that’s obviously politically impossible or b) requiring us to spend more than we take in.
I think you are banging your head against the wall. (Welcome to the club.)
You are banging your head against the wall, but it’s not mutually exclusive with the profound effects of demographics.
Even if we didn’t have the demographic bump of the Baby Boomers there would still be a problem. You can’t have incomes rising at X% per annum and costs rising at 3 times X% per annum without running into a problem.
The choices are actually pretty limited: we’ve got to bring the increase in costs in line with the increase in earnings. That can be done by increasing incomes, lowering costs, or both.
It is mostly health care though at some point interest on the debt passes it. Once we develop the political will to address it, we can fix it.
Steve
We DO spend more than we take in, and how long can that last?
I think because we ARE a democracy, and voters are self interested and pols are sensitive to that problems never get solved until they are a crisis. Yes, when it MUST be solved, it will be.
Steve’s right.